Latest news with #TedRossman
Yahoo
2 days ago
- Business
- Yahoo
Klarna's Downside: Buy Now, Pay Later Users Overspend And Miss Payments
Buy now, pay later provider Klarna took another step toward a U.S. listing last week, reporting progress on its transition into internally developed AI systems. AI-driven staff reductions of 700 contractors have generated "significant efficiency" according to the Swedish company, which now expects revenue per employee to reach $1 million, higher than the $575,000 reported last year. Buy now, pay later payment processing services let retailers offer short-term installment loans at the time of purchase, allowing buyers to spread out payments. The loans are usually interest-free and without service charges, potentially encouraging customers to buy more than they can afford. Not surprisingly, these firms have come under investigation. Notably, the Swedish Financial Supervisory Authority hit Klarna with $46 million in fines in December after accusing it of money laundering in 2021 and 2022. Don't Miss: Hasbro, MGM, and Skechers trust this AI marketing firm — Maximize saving for your retirement and cut down on taxes: . The company filed with the U.S. Securities and Exchange Commission for an IPO in March, citing an American domicile in Columbus Ohio. It postponed plans after President Donald Trump announced tariffs on Europe in April and hasn't responded to the latest rejection by U.S. Federal courts. Klarna reported a 13% revenue increase to $710 million in the first quarter of 2025 but still hasn't said when it will proceed with the offering. The BNPL business model works by charging fees to merchants, like card processors. There may also be flat transaction fees and late fees for missed payments. The second issue could upend the industry after a recent Bankrate survey reported that about "half of buy now, pay later users have experienced issues like overspending and missing payments." While these companies depend on late fees, high incidence rates may attract the attention of regulators. Trending: Invest where it hurts — and help millions heal:. Almost one-third of Americans have used BNPL, according to the survey. Klarna captured 9% of the report's market share while PayPal (NYSE:PYPL) led the pack with 15%. Half of customers reported "issues related to service." Of those, 24% mentioned "overspending," 16% "missed payments" and 15% "regretting a purchase." Gen Z users reported the highest rate of these issues, across all generations. It also revealed "consistent use across all income levels," which is surprising, given the greater financial struggles of the lower classes. The survey highlights a consumer base increasingly burdened by inflation and stubbornly high credit card rates. Bankrate Senior Industry Analyst Ted Rossman summed up the findings, noting that "BNPL can be a good deal if you use it responsibly. It provides access to credit and can help users smooth out their cash flow. But sometimes it can lead to overspending, and you would have been better off waiting until you could pay for the item up front."It's hard to predict Klarna's success as a publicly traded company, given the moral hazards of this business model and financial challenges imposed by a potential trade war. However, things look brighter on the regulatory front because the Trump administration is pulling back on oversight, similar to its first term, scheduling budget reductions in consumer and banking regulations. For now, it's best to just follow the money. Q1 2025 marked Klarna's fourth consecutive profitable quarter. It also reported an impressive 100 million active consumers while merchant growth surged 27%. Those are impressive numbers for this rapidly growing financial services startup. Read Next: Many are using retirement income calculators to check if they're on pace — Image: Shutterstock UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga? PAYPAL HOLDINGS (PYPL): Free Stock Analysis Report This article Klarna's Downside: Buy Now, Pay Later Users Overspend And Miss Payments originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
23-05-2025
- Business
- Yahoo
Credit Card Debt Falls, but Bankrate's Ted Rossman Says It's No Time to Cheer
Wall Street economists breathed a sigh of relief last week when the Federal Reserve Bank of New York's report on household debt in the first quarter disclosed a 2% drop in credit card balances, falling by $29 billion. These folks have grown cautious examining Americans' near-record-level revolving debt, $1,282 trillion in the first quarter, worried they lack the assets to pay their bills. This can signal economic stress that precedes a recession. Total household debt still rose by $167 billion in the quarter, reaching $18.2 trillion. Housing, auto loans and student loans contributed to the total, highlighting major challenges in maintaining a healthy economy. Student loans pose the most troubling obstacle to prosperity right now, with President Donald Trump restarting payment requirements. Don't Miss: Hasbro, MGM, and Skechers trust this AI marketing firm — Deloitte's fastest-growing software company partners with Amazon, Walmart & Target – Bankrate senior industry analyst Ted Rossman warned economists to tread lightly after the report, noting that credit card balances "almost always fall in the first quarter, because people go on this post-holiday spending detox." He explained that borrowers often make New Year's resolutions to "spend less, save more, pay off debt" and "use tax refund money to pay off debt." However, balances "almost always rise in the second and third quarters" and "really spike in the fourth quarter." Credit card usage has skyrocketed since the pandemic, jumping 54% in the last four years. Fortunately, benign reasons may be responsible for at least part of the surge. A tech-savvy generation has popularized germfree electronic transactions since COVID, disrupting formerly cash-heavy venues like supermarkets, pharmacies and transportation. Even so, stressed-out Americans trying to make ends meet are playing a major role in the debt spike. Trending: Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — According to Rossman, about half of Americans now pay off their credit card balances each month, avoiding interest rates that average above 20%. This crowd is less profitable for Visa (NYSE:), Mastercard (NYSE:) and other payment processors, accessing lucrative perks that include travel points and cashback programs. Those who don't pay their balances each month assume the burden, stuck with high interest rates to compensate for more affluent or disciplined customers. Credit card borrowers under economic stress are climbing a very tall hill because the average balance is now approaching $6,000 per month. When they don't pay their balances, the 'minimum payment' becomes a lucrative trap for card processors, taking an average 18 or more years for borrowers with a 20% interest rate to close out the debt. It will also incur nearly $10,000 in interest are seeking help at increasingly alarming rates. Nonprofit credit counseling leader Money Management International reported a 35% spike in new clients last year, fueled by young adults – especially single men – facing the reality of loans under default. In addition to outside assistance, Rossman suggests looking for a 0% balance transfer card. These are special cards offered by large institutions that feature 0% or ultralow introductory rates for a specified period that can last up to two years. Just make sure to pay off your balance before the clock runs out, or you'll find yourself underwater once again. Read Next: Invest where it hurts — and help millions heal:. 'Scrolling To UBI' — Deloitte's #1 fastest-growing software company allows users to earn money on their phones. Image: Shutterstock Up Next: Transform your trading with Benzinga Edge's one-of-a-kind market trade ideas and tools. Click now to access unique insights that can set you ahead in today's competitive market. Get the latest stock analysis from Benzinga? MASTERCARD (MA): Free Stock Analysis Report VISA (V): Free Stock Analysis Report This article Credit Card Debt Falls, but Bankrate's Ted Rossman Says It's No Time to Cheer originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Sign in to access your portfolio
Yahoo
21-05-2025
- Business
- Yahoo
Student loan delinquencies spike as these 'pockets of trouble' grow
Student loan delinquencies surged in the first quarter of 2025 after the US Department of Education resumed reporting missed payments to credit bureaus. Bankrate senior industry analyst Ted Rossman joins Wealth host Brad Smith to explain how this spike could spill over and contribute to delinquency trends across credit cards and auto loans, and household spending patterns. To watch more expert insights and analysis on the latest market action, check out more Wealth here. The New York Fed's latest household debt and credit report revealed student loan delinquencies jumped in the first quarter of the year. Student loan balances grew by $16 billion. And the data shows an uptick in the rate at which balances went from current to delinquent. That comes after the Department of Education mandated that missing loan payments would once again be reported to credit bureaus after a nearly five-year pause. As a result, 7.74% of aggregate student debt was reported 90 plus days delinquent in the first quarter compared to less than 1% in the fourth quarter of 2024. And now, experts are concerned about the possible spillover effects of rising student loan delinquencies on other debt. Here with more, we've got Ted Rossman, who is the Bankrate senior industry analyst here. Ted, let's just start with the data and how many borrowers will now find themselves in delinquencies here. What is the significance of that? It's very significant because student loans stick with you. I mean, obviously we should pay all of our debts back, but something like credit card debt is easier to discharge in bankruptcy. Student loans, not so much. They can garnish your wages, they can take your tax refunds, they can take your other government benefits like Social Security. You really can't wiggle out of that one. So it is really significant that about one in four student loan borrowers are delinquent right now. Close to one in 10 are seriously delinquent. This is the tip of the iceberg because we had that long payment pause and then there was the one year on-ramp and then it's 270 days from there that you're considered in default. So really July 1st is a date to watch. That's really when we're going to start to see these defaults accumulate. It's been a long time coming. And so just like that, we're back into some of the levels that we haven't seen since pre-pandemic. So how does this compare to some of the characteristics that we had seen in the broader, both employment environment, as well as what's the payment environment were looking like, how many people could actually pay down their debt at that period of time and now, compared with how many people are going to be faced with setting a strategy, making sure that they can keep to that strategy here. Delinquencies have gone up on a variety of loan products in recent years. Credit card delinquencies right now are at their highest point since 2011, according to the New York Fed. The growth rate has slowed in recent months, so things are maybe stabilizing a bit, but still, 12% of credit card balances are seriously delinquent. So that is definitely an issue. Auto loans are a problem, especially in the subprime space. Subprime auto delinquencies are worse now than they were during the financial crisis. There's sort of this ticking time bomb of student loan delinquencies. There's very much a spillover effect because if you don't have the money to pay the student loans, maybe you're also running up the credit card, or maybe you're behind on your car loan. A lot of this is overlapping. It's not really a macro threat because, overall, banks knew some of this was coming. The overall debt to income ratio is not so bad on a historical basis. At the household level though, this is highlighting some of that economic inequality. There are definitely a growing number of households that are in financial distress and falling behind and and that definitely bears watching, even at a time when the overall economy is probably better than many realize. These pockets of trouble are growing. And so with that in mind, you you bring up something which was really interesting, especially considering what we've heard from the banks previously and how they assessed household balance sheets. As you think about what this impact could be on household balance sheets, what it could look like on spending and the retail companies that this could also impact here. What are some of the most exposed areas economically? About one in eight households have student loans. The average monthly payment is around $350 a month, and so many people got used to not paying that for a while that now it's just really become a bigger problem. The costs for other things went up, and we could see ripple effects for numerous sectors. A lot of people tell us they're pulling back on discretionary spending, things like travel, dining, live entertainment. 54% say they're cutting back. Now what's interesting is that disconnect between sentiment and reality because people say they're cutting back, but the TSA is processing a record number of air travelers, and bar and restaurant sales were up 8% year over year last month, according to the Census Bureau. So what people say is diverging from what they're doing. The end result could be more diminished savings and more debt loads because if people don't have the money for these things, but they're spending anyway, it's feeding that credit card debt beast, which is problematic. Those balances are near record highs, and interest rates are as well. Ted, good to see you. Thanks so much for taking some time. No problem. Thank you. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
21-05-2025
- Business
- Yahoo
Fed rate cuts, student loan delinquency, IMAX CEO: Wealth
Host Brad Smith tracks this morning's stock market (^DJI, ^IXIC, ^GSPC) moves while speaking to several personal finance experts on today's Wealth. Bankrate senior industry analyst Ted Rossman weighs in on the surge of delinquencies in US student loans after the Department of Education resumed reporting missed payments to credit bureaus. IMAX (IMAX) CEO Richard Gelfond sits down for a conversation about the state of the movie industry ahead of the summer blockbuster season. To watch more expert insights and analysis on the latest market action, check out more Wealth here. Time for Yahoo Finance's market. Stocks slipping as investor optimism around the US-China trade truce continues to wane. Retail earnings dominating the conversation today. Target with the lackluster report, net sales missing expectations, and a cut to its full year outlook. Target CEO saying tariff-related price hikes are a last resort. This comes after Walmart reported its plans to raise prices. Meantime, shares of Chinese EV maker Xpe jumping after reporting a narrower than expected loss. Investors optimistic the company could be on its way to turning a profit. The company weathering the competitive Chinese market seen an all-time high in quarterly EB sales, and shares of Chinese tech giant Baidu rise and actually moving to the downside just a touch. They did top first quarter revenue expectations, increased AI services demand offsetting losses in its ad business. That's your Yahoo Finance market minute this morning. For more on what's trending, you can scan the QR code below. Welcome to Wealth, everyone. I'm Brad Smith. This is brought to you by Synchrony, and this is Yahoo Finance's guide to building your financial footprint. Our community of experts will give you the resources, tools, tips, and tricks that you need to grow your money. Hey, on today's show, portfolio checkup, we're gonna talk to a portfolio manager about stocks that are well positioned for any outcome this summer and burnout budgeting every day this week on wealth. We're talking about handling your finances after an unexpected layoff. Today's taxes work when you're unemployed. Plus gas prices ahead of Memorial Day. We'll reveal how much you can expect to pay at the pump ahead of the long weekend. All that much more coming up on today's show. But first, let's take a look at some of the market action. 90 minutes into the trading day, we are mixed right now as the Dow and the S&P 500 are lower. The Nasdaq still holding on to flat but ultimately, uh, fractional gains here. We're continuing to see the pullback after the.S&P 500 snapped a six day winning streak. My next guest is closely watching the biggest risks to the markets, including trade negotiations and the tax bill in Washington. Joining me now, we've got Brian Mulberry, Zach's investment management client portfolio manager. Uh, Brian, you're expecting pressure on the market from the end of June to the end of July, but you have some picks that you say are well positioned for any outcome the good, the bad, the ugly this summer here, walk us through that. Yeah, absolutely. So there's some pretty big questions that still need to be answered for this recent market rally to kind of be confirmed. We have some, you know, trade negotiations, but only one firm deal that is permanent and long term with the UK. There are other negotiations ongoing, including with China, but they're very temporary at this moment in time. And until we start to see more of a permanent deal take shape, there has to be some volatility that along with what we're seeing on a day to day negotiation. What comes out of that? So we want to see more of that, but also at the very same time Congress is negotiating the next budget deal that's going to include very important outcomes when it comes to personal income taxes as well as corporate income taxes. If you think tariffs are a major headwind, the corporate tax rate simply going back to where it was before would be from 21 21% today back to.28% where it was in 2016, that affects everybody. The thing about tariffs is you actually have a decision. You can actually avoid or minimize that tariff impact by simply buying things that are made here domestically and avoid that particular cost increase, but taxes impact everybody across the board. So those are still very large question marks that need to be answered over the summer months. Coincidentally, we know that the to about basically July or August when these questions need to be answered. That's when basically the 60 and 90 day windows that are out there for trade negotiations expire, and we also have to have a budget passed by the end of August or early September. So that makes us ripe for some more volatility over the summer months until we get more clarity on the outcomes of these big questions that are still in frontof us. And so another big question in front of on the interest rate policy side we've gone from a probability of 100 basis points of cuts over the course of this year to the end of this year to not just 50 by the end of the year based on the CMB Fed watch and my last check just before the show. So where does the Fed sit within how the markets are kind of ranking all of the different inputs that need to be considered and ultimately worked through in the minds of investors? Yeah, absolutely. E Zachs, we've always kind of been in the camp of one or two rate cuts makes the most sense simply because the underlying economy is still pretty firm, and I think we've heard that now from a number of Fed speakers this week as well as what we got from the latest FOMC meeting in the Q&A from Chairman Powell, is that most of the hard data, economically speaking, is still pretty firm and pretty solid. Retail sales pretty strong, you know, employment still pretty strong. All of that kind of stuff leads us to prices aren't really coming down to that 2% target, so why would we have room to lower interest rates at this point? Something else has to change in the data before we're going to see a change in monetary policy. That also probably takes time, probably likely in that Q4 type of range. So September, October, November, maybe we get one or two rate cuts later in the year because by then we'll have continued to make progress against that inflationary goal of down to 2%. So yes, it's still a a big impact that means that rates remain above 4% for the majority of this year and as rates stay higher for longer, that is a material headwind in terms of the cost of capital, and it does impact earnings negatively, the longer rates stay higher. So that's certainly one issue that's out there. I think that's been very known for a long time, and managers of businesses have been able to kind of, I think absorb that rates are not likely to go down by 100 basis points as the market wants it to, I certainly understand that lower rates would be better for growth, but there has to be a reason to do it, and the data just simply isn't taking shape at this point in order to push rates down that much, at least right now. And so with the time that we have left, Brian, I just want to circle back to some of the companies, the types of companies or balance sheet characteristics that you're prioritizing in your top summer stock picks. Yeah, absolutely. So with all of these headwinds in mind and and the volatility that could be in front of us, we like stocks that are a little bit more durable in terms of their earning structure, one being JPMorgan. Think about this. Banks don't really pay tariffs, and if there is such a big business investment boom that's going on, and there is certainly Q1 GDP showed us business investment up 22%, then that's going to need financing, and we think large multinational banks will play a big role in that diversity of income generating their balance sheet. Obviously investment trading did well. Investment banking is continuing to pick up. So this is a good name that doesn't really get subject to tariffs and and a very strong balance sheet at this point in time, a name that's already up 11% on the year, doing much better than the broader market. Also, other areas of investment, right, piggybacking on that business investment. You can look at things like John Deere and Caterpillar where there are going to be literally shovels in the ground for these infrastructure centers and infrastructure are going to be necessary for growth in what new manufacturing being onshored is going to actually be able to accomplish at this point in time. So these are names that have very durable earning structures, strong balance sheets with lower levels of debt, a good dividend payment for those patient investors as well. And looking at Caterpillar, their backlog of orders is now over $35 billion. So the future profitability of the company looks very strong, and Deere that's working on innovation both internally for production policy but also making farmers more productive using AI technology as well. So these are just good durable names that can really help your portfolio withstand volatility over this period of time. We believe that there's always a reason to be invested right now. You want to focus on higher quality stocks with higher quality balance sheets and a strong dividend. Brian, good to see you. Thanks so much for taking the time. Thank time for some of today's trending tickers. We are watching Medtronic and Canada Goose. Joining me now, we've got my morning brief co-host Madison Mills. All right, let's set the stage for the folks at home. Madison. First up, medical device maker Medtronic issuing a lower than expected earnings per share outlook for 2026 and its fourth quarter earnings report. The firm also telling Bloomberg that it expects an at least $200 million impact from tariffs on its exports shares are moving lower right about 2% right now reallyinteresting to come out of this here and just to run through some of those numbers again, the adjusted EPS coming in the range of 550 to 560. That was a little below Wall Street estimates of 583 here. But I think some of the sticking points are what the company is doing to sort of be able to withstand the impact of these tariffs. The company is saying it plans to separate its diabetes business that houses its insulin pumps, some other wearable medical devices. That's going to be a standalone company going spinoff here is supposed to come in over the next 18 months through a series of deals. The company also talking about concerns about quality management, also cybersecurity related issues, which is really important within the medical wearable space in particular. This spinoff would allow Medtronics to sort of be able to cushion its profit margins a little bit here. The heart devices specifically are one of the biggest drivers of the company's profits, so this spinoff would to focus on that, but as you can see based on the share action this morning under a touch of pressure off nearly 2%, yeah, massive cardiovascular portfolio that the company has here. Next up, the goose is loose. Canada Goose reporting fourth quarter earnings that beat estimates. The stock rising on that beat despite the company not providing an outlook for fiscal 2026, citing ongoing macroeconomic uncertainty here. Take a look at shares. I mean, flying by about 28 2.9% right now, Matty. I mean this is not prime Canada Goose wearing weather or season right now, but no doubt Canada Goose had perhaps a good last season. Yeah, no exactly that's exactly right. The revenue was up 7.4% from the same period last year. The question, of course, for all of these retailers is, OK, well what's going to happen next? Well, they had a really good story to tell on the call, one rooted in the data that 75% of their units are made in Canada, almost compliant with the USMCA agreement, meaning they are currently exempt from tariffs. They do have production in Europe, so that will face an increase in tariffs. But given the small amount of production done in tariffs and the pending negotiations between the United States and the EU, that may not be the biggest impact. The company is saying it's going to be a minimal financial impact. Another key thing for Canada Goose is their customers, obviously a higher end customer when you take a look at some of those higher end companies coming in with you've got Toll Brothers, for example. We are continuing to see that the luxury higher wealth consumers continue to spend in this environment, and that could be a boon for a company like Canada Goose going forward. All right, want to tear a free Canada Goose jacket, just take a flight to Montreal perhaps and pick it up, at least if you're in New York, uh, if you're in other parts of the country. I don't know what to tell you, but practice your French anyway, you can scan the QR code below to track the best and worst performing stocks of the session with Yahoo Finance's trending tickers page. Mattie, thank got all your markets action ahead. Stay tuned. You're watching Yahoo New York Fed's latest household debt and credit report revealed student loan delinquencies jumped in the first quarter of the year. Student loan balances grew by $16 billion and the data shows an uptick in the rate at which balances went from current to comes after the Department of Education mandated that missing loan payments would once again be reported to credit bureaus after a nearly five year pause. As a result, 7.74% of aggregate student debt was reported 90+ days delinquent in the first quarter compared to less than 1% in the fourth quarter of now experts are concerned about the possible spillover effects of rising student loan delinquencies on other debts. Here with more we've got Ted Rossman who is the bank rates senior industry analyst here. Ted, let's just start with the data and how many borrowers will now find themselves in delinquencies here. What is the significance of that? It's very significant because student loans stick with you. I mean, obviously we should pay all of our debts back, but something like credit card debt is easier to discharge in bankruptcy. Student loans, not so much. They can garnish your wages, they can take your tax refunds, they can take your other government benefits like Social Security. You really can't wiggle out of that one. So it is really about 1 in 4 student loan borrowers are delinquent right now. Close to 1 in 10 are seriously delinquent. This is the tip of the iceberg because we had that long payment pause, and then there was the 1 year on ramp. And then it's 270 days from there that you're considered in default. So really, July 1st is a date to watch. That's really when we're gonna start to see these it's been a long time coming and so just like that we're back into some of the levels that we haven't seen since pre-pandemic. So how does this compare to some of the characteristics that we had seen in the broader both employment environment as well as what the payment environment was looking like, how many people could actually pay down their debt at that period of now compared with how many people are going to be faced with setting a strategy, making sure that they can keep to that strategy here. Delinquencies have gone up on a variety of loan products in recent years. Credit card delinquencies right now are at their highest point since 2011, according to the New York Fed. The growth rate has slowed in recent months, so things are maybe stabilizing a bit, but still, 12% of credit card balances are seriously delinquent. So that is definitely an issue. Auto loans are a problem, especially in the subprime auto delinquencies are worse now than they were during the financial crisis. There's sort of this ticking time bomb of student loan delinquencies. There's very much a spillover effect because if you don't have the money to pay the student loans, maybe you're also running up the credit card, or maybe you're behind on your car loan. A lot of this is overlapping. It's not really a macro threat because overall,Banks knew some of this was coming. The overall debt to income ratio is not so bad on a historical basis. At the household level though, this is highlighting some of that economic inequality. There are definitely a growing number of households that are in financial distress and falling behind, and, and that definitely bears watching even at a time when the overall economy is probably better than many realize. The these pockets of trouble are growing. And so with that in mind, you, you bring up something which was really interesting, especially considering what we've heard from the banks previously and how they assessed household balance sheets as you think about what this impact could be on household balance sheets, what it could look like on spending in the retail companies that this could also impact here, what are some of the most exposed areas economically? About 1 in 8 households have student loans. The average monthly payment is around $350 a month, and so many people got used to not paying that for a while thatNow it's just really become a bigger problem. The cost for other things went up, and we could see ripple effects for numerous sectors. A lot of people tell us they're pulling back on discretionary spending, things like travel, dining, live entertainment, 54% say they're cutting back. Now, what's interesting is that disconnect between sentiment and reality, because people say they're cutting the TSA is processing a record number of air travelers and bar and restaurant sales were up 8% year over year last month, according to the Census Bureau. So what people say is diverging from what they're doing, the end result could be more diminished savings and more debt loads because if people don't have the money for these things but they're spending feeding that credit card debt beast, which is problematic. Those balances are near record highs and interest rates are as well. Ted, good to see you. Thanks so much for taking sometime. No problem, thank you. Coming up, everyone, home improvement retailers, Home Depot and Lowe's both reporting a pullback in spending on big ticket items among homeowners. We get insight into what consumers are still willing to spend on next on excited to partner with Synchrony Bank, our premier sponsor for Wealth. Synchrony Bank is working with Yahoo Finance and Wealth to bring you the insights for your personal finance playbook and help you make your money work for you. Let's get you a check on the markets right now as we're taking a look at the NASDAQ 100. We had a lot of red as we were starting off today's trading session. Things have improved just a little bit, but you still see more laggards and inventors right now. Alphabet leading the pack, that's up 5.25%. Google Alphabet, whatever you call them, call them higher. This is Palo Alto PANW is the ticker symbol there. You're taking a look at a move lower this after the company reported earnings after the close yesterday. You're taking a look at shares in decline by about 6.25% here. Also want to take a look at the Dow 30 components as of right now you are still seeing what looks like more laggards and advancers. UnitedHealthcare pulling up the caboose. It's been a no good, can't get back very bad type of month and uh we'll put that on a month to date activity for United Health. It's down 25%.percent over the past trailing 15 sessions here. Nvidia that's up by about 1%. And then just lastly here, let's take a look at the 11 S&P 500 sectors as we're seeing 9 out of 11 sectors in native territory overall, the index itself, it's down by about 0.1%, but we're off of today's session lows. That is a good thing, folks. We're being led right now by communication services that catching a bid. It's up by about 0.1%. However, pulling up the boost, you've got healthcare. Yeah, that's down by about 1% here.A little bonus activity for you here. Why? Because it's a celebration time for Bitcoin here, notching a new all-time high as we're taking a look at 109,000. That is your new number that we're continuing to track and see if we can continue to hover around Bitcoin, BTC USD up 4% here on the day, taking some of the other major cryptocurrencies with it. Take a look at Ethereum, ether, whatever you call it, call it up right now by about 3.8%.And continuing to watch that crypto space, we're going to see how all of this transpires going forward. Of course, a big week as Coinbase entered into the S&P 500 to start off the trading of Lowe's lower after reporting better than expected earnings and growing sales from professionals offsetting weakness in the DIY consumer. Homeowners continue to spend less on big ticket items though amid broader economic uncertainty. Angie's of home spending report found that 48% of homeowners are more stressed about home repairs than they were in January. Joining me now, we've got Angie Hicks, Angie co-founder. Angie, we gotta ask you first and foremost, where is a lot of the stress coming from for homeowners? I think quite honestly, when it comes to taking care of your home, it's for most of us our largest asset, and we tend to spend, you know, 1 to 2% of the value of the home on improvements and repairs each year. So it really comes down to kind of budgeting and understanding what needs to be done around your house and how to best invest those dollars. And so from what you're hearing, are there massive delays inIn some of the DIY projects that homeowners would typically be doing. Well, we did run a pulse survey to update our state of home spending in April and saw that 70% of homeowners said they had delayed a project. But I think what you really need to understand here is what that, you know, actually means. We also found that they're doing more maintenance, which is very common, it's a very common phenomena when we see an economic downturn or uncertainty, because what they want to do is not be surprised. They don't want to be surprised by spending. So they're gonna make sure they're getting tuned up so it doesn't go out on the hottest day of the year, have their roof inspected so they don't have a leak. So they become just much more conscientious about those day to day things, and they're going to do less discretionary items, more non-discretionary. So maybe we're not putting the swimming pool in this year, but we are still going to make sure that we're maintaining that house. So you see some shifts going on there. And quite honestly, some of those DIY projectsMight fall in that discretionary bucket that they might choose to hold offon. Yeah, we had a perfectly good blow up pool, uh, at one point when we were growing up. So ultimately just go stand next to the hose for a little bit. Yeah, exactly. So as you think about some of the lower cost alternatives to full remodels, because those are some of the projects that homeowners will take on if they're looking to maybe list their home within the next 12 months, what are you hearing on that from? What's the pulse? Yeah, so a lot of times, uh, kitchens and bathrooms are always at the top of the renovation list. And you know, a lot of times people think, are these tens of thousands of dollars of projects? Yes, they can be. Some can be very big projects, but there are a lot of things that you can do to make it even a more efficient, uh, project, economical and get functionality. For example, in your kitchen. If you want toFresher look. Consider updating the countertops. If you can avoid updating the cabinets, that's where the big money is. And do not change the footprint of your kitchen if you can, because you start moving plumbing and electrical, the cost starts to add up. Same kind of thing in the bathroom. Think about maybe changing out the flooring, updating a sink, but if you're going to redo your whole shower, it's gonna be more expensive. so how are the pros on the other side of this responding to what homeowners are ultimately signaling to them, the market, the, the professionals that are also working on these projects? Absolutely. So the professionals are working with homeowners more talking to them about alternatives. You know, I've, I've just had our Angie pro council meeting the other day. We were talking a lot with pros about the different things that they see where they can kind of help homeowners make trade-offs and make good decisions about how to invest those dollars, uh, and, you know, and, and they're uh sorry, then they also are looking at ways that they can aggregate projects together. So you know if they offer both window cleaning, gutter cleaning, suggesting consumers get those done together so that's one trip and it can be a more efficient economical job. What is the decision tree for whether or not you should actually be starting a new project right now? I mean, first you need to think about your budget. Look at your budget, understand how much you have to spend. And also, I always encourage homeowners to do a walk around your house and evaluate everything you see, because you might choose to do the wrong project, and we don't want people to do that, you know, so you want to start with structural problems, then go to mechanical things, and then work your more cosmetic, kind of more upgrade type items. So do that so that you know you're like, hey, my refrigerator's on its last leg. Uh, you don't go and put a new deck on and then realize come August that you need to buy a refrigerator and you feel the crunch. Angie, great to see you. Thanks so much for taking the time as always. Thank you. Coming up, everyone, how taxes work when you're unemployed. We have tips to help you navigate every scenario that is next. Oh of Americans get their Social Security benefit checks on most Wednesdays every month. How does the payment schedule work though? Here with more, we've got Yahoo Finance senior columnist Kerry Hannon. Carrie, what do we know on this? Hey Brad, um, yeah, people get a little confused about this, but you figure Social Security Administration has 70 million people, they're sending checks out, so they do these in batches based on your birthday. So if your birthday is between the 1st and the 10th of the month, you will get your payment sent on the 2nd Wednesday of the month. If it's between the the 20th, it's the 3rd Wednesday, and if it's between the 21st and the 31st, it's the 4th Wednesday. If you get supplemental security payments, income from that, that's the first of the month. But here's the deal if you're getting benefits based on your spouse's benefit, um, that is going to be based birthday, not yours. So just remember that. Now here's the thing most people do get their benefits deposited electronically in their bank accounts these days, um, and that's usually by 9 a.m. on that Wednesday that you're designated for. If you do get a paper, uh, check, you need to allow for 3 business days for that to get to if you have a problem, Brad, there are things you can do. You should call the 800 number if it's more than 3 days late. Call the social, the 800 number. You can go to your local social security office. You can go to your My Social Security account online and see what's happening. I definitely recommend if you don't do direct deposit, do it. Uh, if it's at all possible, that's the safest way to get make sure you're paid on time, um, make sure has all and Social Security has your accurate bank account information and your address, and you can even sign up from alerts from Social Security that they will ding you whenever that payment has been deposited. Carrie, another story that you're following here, credit card debt is getting in the way of saving for many workers nearing retirement. What are you hearing on that front? Yeah, Brad, this has been a problem that's been steadily growing and, and it's of those 50+ are carrying credit card debt from month to month, and this is from a study by AARP. And what's troubling about that is that with interest rates, credit card interest rates are, you know, topping 21%. This is really onerous and super hard to get out of if you start accumulating these interest charges. It's very difficult to get out from under that. And as a result, people have beenPulling back on saving, uh, often, I'm not saying everyone is, but often pulled back from saving for retirement they say I can't, I'm trying to pay down this debt or they're taking, we've seen an uptick in people taking uh loans from their 401k plans which isn't a horrible thing in the sense that you're paying down debt and you are going to repay yourself. You're missing out on, on other things during that time, but it is uh is one solution but other one is people are actually raiding their accounts and withdrawing for hardship withdrawals to pay some of these debt expenses and that if you're under 59.5%, you're paying the 10% penalty, you're paying tax on that, and so that's something we, we really like to shy away from. So I think that one of the big drivers though, I will add is medical costs, and people say it's unexpected expenses that's putting them in the if for people over 65, I'm just going to note this one number I just saw that 1 in 10 people over 65 with health care debt they owe more than $10,000. I mean this is, this is something that a lot of people are grappling with, Brad. So what are some strategies that people can use to cut both their credit card and their overall debt? Yeah. So number one, you've got to face it, right? Face the music, do the numbers, really don't stuff those bills away, look at them and find out what, what your situation is. So, number one, know what your situation, your picture is. Number 2, if it's credit card up the phone and call your credit card insurer. This isn't a guarantee, but you can often, uh, negotiate with them to lower your rate, and this is particularly if you've been a good, uh, someone who's paid regularly on time, you've been a customer of them for, for a period of time. So it's worth a shot to see if you can get them to lower your interest rate there. The second thing is to look for balance transfer cards, which these are credit cards that have a for say 21 months, uh, and that you pay a small fee of 3% perhaps to switch that to this card, but it's a very good way to give yourself some breathing room to start whittling down some of that debt during that period of debt of interest rate relief. Um, another thing I encourage people to do automatic payments so you don't get, you don't miss a payment and you don't, uh, pay late, and these cause extra fees and charges. So that's.A great way to get control of it. Um, and again, there are two methods to how people like to pay down debt, and one is called the, the snowball effect, which is, you know, you basically start with your smaller debt and you move up until you get through them. And psychologically, that can be a nice way to feel like you're accomplishing something. The other way is the avalanche method, and that's starting with the highest interest rate and, and whittling down from there. And I personally thinkThat's the best way because you're getting rid of that high interest, uh, interest first, if you can do that. Um, some other tips are you could get a personal loan from a bank, but again, those can be around 8% to 12%, but you have to have a pretty good credit rating, but that's one way in order to consolidate some of your debts, pull them all together and have a 3 year loan that helps you pay them off. And finally, uh, credit turn to a credit counseling um agency, a nonprofit one to help you in the sense that they will go negotiate with some of those lenders for you, um, and, and the Justice Department has a list of some of those they approved, but, but that's one method. But, but I think the most important thing is to take control, to face your debt and try really hard to start tackling it now. Carrie, thanks so much for breaking all this down. Appreciate week on wealth we're helping you budget for burnout walking you through the financial impact if you quit your job or are unexpectedly laid off today we're focusing on the impact to your taxes. Joining me now we've got Mark Steber, who is the Jackson Hewitt tax service chief tax information officer. Mark, good to see you again. I, I wanna go through some different scenarios and the tax implications for each of them, and perhaps we can start with unemployment benefits if you are laid off and start receiving benefits, what does that mean for your taxes? Well, first thing you need to know is you're not alone. The IRS receives tens of millions of these on tax returns each year, but it's important to remember unemployment benefits, even though you're in a financial crunch time, uh, that's going to be fully taxable at tax time and not only is it taxable, you're probably a 1099G for government payments so you can't really leave it off your tax return without some risk so just know that either short term or long term unemployment benefits are taxable for federal and it varies from state to state so don't get surprised by that plan for it and budget for it accordingly. Now what about taxes on severance pay? Say you and your employer, you go separate ways whether decidedly and and in many cases it's undecidedly how do you make sure you go about that effectively? Yeah, severance pay is particularly sticky uh as it's called pay it is also without much surprise taxable. Now what catches people off guard is sometimes those packages are big to medium to to even, you know, small, but it's all taxable and you generally do have taxes withheld on that, uh, unlike unemployment benefits where you have to opt in to have your withholdings, you know, on those payments, and many people do not. The problem with your severance package is not only is it taxable, not only is it just gonna go on your tax return, generally they don't necessarily withhold enough, it's a larger package and pushes you into a higher bracket at tax time, you may be underpaid there as well for a double whammy when it comes to tax time on unemployment and severance pay all taxable. You may not have had any tax withheld on your unemployment and the amount you had withheld on your severance might not have been enough to compensate for the new rate that you're in because it's all ballooned into one year. So that's why it's critical that you do a mid-year checkup and all throughout the year when you have one of these big life changes like unemployment short term or even longerterm. So let's say you lose your job and then start a side hustle to make some extra cash. How do the taxes work there? Yeah, that's the triple whammy. Uh, if you're making income and that's why it's important to talk to a tax pro, even side hustle, short term, long term, large amount, small amount, that's generally gonna be taxable on your net income. And not only that, if you're getting paid through those third party payment apps like PayPal and so forth, you're gonna get another 1099K dollars if it's over a small amount like $2500 and so is the IRS. So you can't hide from that either. So again, it'll be important that you budget, it'll be important to set money aside for for unemployment, severance pay, and that side hustle net income, but the good news is there's a lot of deductions available and we saw this during the pandemic for those 1020, 30, 40 million people even with jobs, especially those without that do have side hustles, a lot of deductions, a lot of tax breaks, a lot of things you can do to offset that income. Don't overlook those and leave them off because the IRS is not gonna come around and say, here's some benefits. They are gonna come around and say, hey, you didn't put this income on your tax return. You owe money and that's usually at the worst time. So let's say you were laid off and then you find a new job, but the company is based in a different state. What do people need to know about the tax implications there? Yeah, that'sa great question and one that often catches people off guard. You owe federal taxes on all income during the year, and we talked about those, but generally you owe income in the state where you earn the money. Now a lot of things have changed since the pandemic, but where you earn it, where your employer has direction and control, is generally gonna be where you owe it, whether you're there or not. But what catches people off you're in one city like New York and you owe state taxes there, you get laid off, you move across the river to New Jersey now you're gonna owe New York monies on the New York earnings and then New Jersey on the New Jersey earnings even if you're living in New Jersey now, you still might owe in that prior state. So if you have a life change like laid off or even if you don't, and when you move to a different state you know, you need to pay attention to those state tax implications because states are very, very money hungry and they've gotten very good at tracking you even if you've left the state. Yeah, I know athletes know that all too well with some of the earnings that come in from competitive events in different states. All right, we got to leave things there, Mark. I would love to continue this conversation, very valuable insights. Great to be here. Good luck to you and good luck to those who've had unemployment. Life change. up we're talking with the CEO of IMAX about the summer movie season ahead plus how trade policy could impact Hollywood. That's next on rising this morning, briefly hitting an all-time high above $109,000 earlier, but moving slightly off of that high right now, just barely. Yahoo Finance senior markets reporter Ferre breaks it down for us. We don't want to throw cold water on it so quick in this. Oh no, because we are right up against that $110,000 threshold. Take a look at Bitcoin right now. It's trading just below.109, but look, it was trading just above 109,000, around 400 that it got to that all-time record high. And look, year to date it's up 15% and from its April lows when it was around 76,000, just below 80,000, it's up more than 40%. So it has really rallied over the last several weeks and part of this has to do with a moreOptimistic regulatory framework because you've got that stablecoin bill that's in the Senate you've got more institutional buying and also you have what one analyst has been saying that has been this investor shift to buy the dips. So investors have been buying the dips along the way, sending it to an all-time record high, but we also, Brad, want to talk today about gasoline Americans are going to be hitting the road this weekend for Memorial Day, and we're tracking how much they are going to be paying for these gasoline prices. So we're looking at AAA right now that's at $33.18 per gallon for gasoline. A week ago is about the same. A month ago, a little bit less, so we've seen a little bit of an uptick, but look, the trends are going it comes to gasoline, in fact, you've got Gasbuddy that's saying that this Memorial Day weekend you are going to be paying the lowest price for gasoline since 2021. So we have been seeing declining year over year gasoline prices, and you also are seeing that Americans are going to be traveling more this summer. You've got BFA that's saying that around 70% of going to be taking summer vacations. They're going to be traveling and part of this has to do with road trips. They are going to be taking more road trips. The green is the driving, so you can see middle income, high income, and low income. And as you can expect, the lower income households are going to be driving more this summer, guys. Alright, soundslike I'm asking my parents to borrow the good car this summer. Nez, thanks so much. Thank reported a record $298 million global box office in the first quarter. That number will likely get even higher as additional films filmed for IMAX will hit theaters this summer, including the Fantastic Four, How to Train Your Dragon, Mission Impossible, and F1. Joining me now to discuss the state of the business and how consumer demand is holding up, we've got Richard Gelfond, IMAX CEO. I'm also joined by Yahoo Finance senior reporter Alexandra Kal. I my gosh, we're at like Mission Impossible, like 17 at this juncture, but they still continue to do well. They're filmed in IMAX, and it seems like that's the way that consumers who are still going into the movie theaters despite whatever economic pressures there are, want to consume some of these big hit films. Well, um, going to the movies is still a relatively inexpensive form of enjoyment. Like if you compare it to concerts and sporting events all which prices have higher and um the pandemic I think people just got tired of sitting on their couches and watching their television and watching their favorite streaming so I think the trends have really been in IMAX's favor, meaning people want blockbuster movies, they want out of home experiences, and they want something special and you know, I know when I go to a regular movie that's not that my TV set, it's like, yeah, but if you go to an IMAX film and you go to a theater, the sound, the crowd, you know, the seating, it's just a much more exciting thing and nothing fits that better obviously than Tom Cruise and Mission Impossible. Yeah, Rich, and I was at the early screening yesterday. I took my friend with me and we were talking about how we literally felt like we were flying or in the water with Tom Cruise during scenes and it got me thinking about the overall IMAX experience and obviously like you were just laying out those big budget action packed movies they do well but we also saw big outperformance from other films like Sinners for example which relative basis a much smaller film. So what does that tell us about the types of movies that people are craving right now? And is it harder or easier to predict some of these blockbusters? Um, well, I think you, uh, in terms of the blockbusters, I think it's pretty easy to predict a range, you know, obviously the question is how far in that range. So, uh, the Mission Impossibles have done between 600 million and 800 million, pretty much all of them, and this is the final one. So it doesn't take a genius to figure out the range and where you're gonna get in there, but I think sinners, I'm so glad you raised was a great example of something that really wasn't expected to do as well as it did, and Ryan Coogler is an a filmmaker and the movie was, um, you know, shot so beautifully and was such a good story, but I also think the IMAX film of it all had something to do with it. So IMAX film kind of has a cult following and the last the last IMAX movie our cameras was Oppenheimer and the next one is Odyssey, which is Nolan's next film, which is coming out, um, next July. So this is the only chance to see it and I, we did 20% of the global box office on less than 1% of the screens and today's actually the last day, maybe tomorrow, that it's playing and I happened to be at Lincoln Square this morning and it was two sold out today a month into the run. So I think the IMAX of it all and the IMAX film of it all and matching that with such an accomplished filmmaker as Ryan creates its own buzz in a way it didn't have its own IP but IMAX becomes the IP around it. What does that tell you about the need for more originals like sinners to really reinvigorate so much of the new titles for the box office. Well, I don't think you could over generalize, Brad. I think you need both things. I mean, when you look at, you know, the box office, uh, like Minecraft that had some of its own IP and you know, you talked a little bit about the slate that's coming up this year, obviously things like Jurassic World and how to Train Your Dragon have their their own name and IP going for them, but I think.I think you need both. I don't think people, you know, you joked at the beginning that this was Mission 17. You know, I don't think it feels like it. It's been coming out since I was in like when you see it elementary school. It's fresh and it's new, and Tom still looks pretty good doing more stunts. He's doing, he's doing more stunts, but I think it's a combination of that and I think, you know, the world and the media gets a little caught up when a blockbuster doesn't work. Oh, it's all And then when original content, um, doesn't work, oh, it's too high a gamble, you need IP but I think it's that right mixture and I think IMAX really facilitates that because partly when the IMAX brand is involved, they know we're like sort of a curator of global content. So when they see the IMAX name, they know we're just not gonna do any movie. It's gonna have to be something really and special and Rich, IMAX in particular is a very global company and I'm curious to get your opinion on this given how steeped you are in this industry, but we heard President Donald Trump float this possible 100% tariff on foreign made movies. We then had that counter proposal from Governor Newsom. What do you make of the idea of tariffs on movies and really beyond that, do you think more incentives need to be placed here in the US to bring filmmaking maybe to home back home? Yeah, Ali, I, you know, I wasn't worried when I heard, you know, the president say that it's not very realistic because it's really like a tariff on IP and tariffs go on goods. So are you gonna put tariffs on software which is made overseas and what is made really mean? Anyway, people work from their homes, they work all over the I don't really think that was a proposal that people took very seriously, and I don't think it's gonna happen. On the other hand, I do think we need more incentives at home, as you know, a lot of films are made in London now. They're made in Australia, Canada, Vancouver and Toronto are big places films are made, and they have great bring the talent there. So I think California is on the right track and I think once the president clarified it a little bit, I think that's the direction he's gonna go. Rich, great to see you here in studio. We actually are running against the end of the hour here. We got to have you back in studiosoon. OK, great to see both of you. Thanks. That's it for wealth, everyone. I'm Brad Smith. Thank you for watching. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
21-05-2025
- Business
- Yahoo
Student loan delinquencies spike as these 'pockets of trouble' grow
Student loan delinquencies surged in the first quarter of 2025 after the US Department of Education resumed reporting missed payments to credit bureaus. Bankrate senior industry analyst Ted Rossman joins Wealth host Brad Smith to explain how this spike could spill over and contribute to delinquency trends across credit cards and auto loans, and household spending patterns. To watch more expert insights and analysis on the latest market action, check out more Wealth here.
